1. Ask an annuity broker
Ask an annuity broker to find the best deal for you by shopping around to compare annuity rates from all the insurance companies that sell annuities in Canada.
2. Decide on the type of annuity that fits your needs.
a. Single life annuity
b. Joint life annuity
c. Term certain annuity
3. Fund type
a. Are the funds from a non-registered account (savings, chequing, TFSA or GIC)
b. Are the funds from a registered account (RRSP, RRIF or RPP)
4. Premium amount
The amount of funds you are willing to invest in the annuity.
5. Payment frequency
When would you like to receive the payments (monthly, quarterly, semi-annual, annually)
6. Decide on the extra options you want
a. Guarantee period (none, 5yr, 10yr, 15yr, 20yr or maximum available) Provides you with income for life, plus guarantees X years of payments to your beneficiary in case you die within the first X years of your contract.
b. Indexing option
Payments increase with inflation to maintain your buying power
7. Purchase date
The date when you would like to buy the annuity
8. Start date
The date when you want the annuity payments to start. The norm is usually month after the purchase.
9. Signed Application, Copy of ID, Void cheque, Cheque (for non-registered funds) or Transfer form (for registered funds)
The following documents are then sent to the insurance company by the agent or broker for the annuity contract to be issued.
10. Annuity Contract
The contract is then sent to the annuitant and the income payments are deposited into your account.